Halftime. And a small rally to finish out the first half and the second quarter. Stocks started the session with solid gains, the Dow was up about 290 points in the morning, and managed to hang on to a modest gain. The Nasdaq dropped 2.4 percent for the week, its worst weekly performance in three months, while the Dow and S&P 500 fell at 1.3 percent each. The Russell 2000, meanwhile, dropped more than 2 percent. The S&P 500 is up 1.7 percent this year, while the Dow is down 1.8 percent, marking its worst first-half performance since 2010. Meanwhile, the Nasdaq and the small-caps Russell 2000 have outperformed with gains of 8.8 percent and 7.1 percent.

The Dow Jones Industrial Average and the S&P 500 index are still in correction territory; the correction has been in place ever since Feb. 8, when concerns that inflation was returning to the economy sparked a selloff that led to their dropping 10% from record levels hit earlier in the year. Both the Dow and the S&P have recovered some of those losses, but not enough to exit correction territory (the Nasdaq Composite, which never officially corrected, hit a record earlier this month). Both the Dow and the S&P have been in correction territory for 99 trading days. This stands as the longest such stretch since the financial crisis in 2008, when 108 days passed before the two exited corrections.

Today, shares of Nike soared 13 percent to hit an all-time high of $81 after the world’s largest footwear maker reported a return to growth in North America in the last quarter and gave an upbeat forecast for the year. Nike accounted for almost all of the gain in the Dow.

The S&P bank sector index rose 1.1 percent after most banks cleared the second part of the Federal Reserve’s annual stress tests. That opened the floodgates for banks to increase dividends and buybacks. Wells Fargo led the gains, up 4.4 percent, while shares of Citigroup, U.S. Bancorp, M&T Bank and SunTrust were all up more than 1 percent.

Semiconductor stocks logged their worst quarter in nearly three years as trade war fears resonate through the industry, but to be fair, the industry has had a nice run. The Philadelphia Semiconductor Index SOX, dropped 0.5% for the second quarter, even with a 0.8% gain on today, for its first declining quarter since the quarter ended Sept. 30, 2015. Since then the Philly index has grown 118%, with Nvidia leading the charge – up almost 900%, and AMD up nearly 800%.

Shares of Vertex Pharmaceuticals jumped 15 percent, the most on the S&P 500, after rival Galapagos reported disappointing trial data for a cystic fibrosis program.

KB Home shares climbed 7.2 percent after the homebuilder’s second-quarter results beat estimates. The strong results also boosted shares of other homebuilders, including D.R. Horton and PulteGroup.

Consumer prices as measured by the personal consumption expenditures (PCE) price index rose 0.2 percent after a similar gain in April. In the 12 months through May, the PCE price index surged 2.3 percent. That was the largest rise since March 2012 and followed a 2.0 percent increase in April. Excluding the volatile food and energy components, the PCE price index advanced 0.2 percent for a sixth straight month. That lifted the year-on-year increase in the so-called core PCE price index to 2.0 percent, the biggest gain since April 2012. The annual core PCE price index rose 1.8 percent in April. The PCE is the Federal Reserve’s preferred measure of inflation. The Fed increased interest rates early this month for a second time this year and forecast two more rate hikes by the end of 2018. Inflation is pushing higher in part because of a tightening labor market, which is characterized by a 3.8 percent unemployment rate. The Fed has also indicated they are comfortable with slightly overshooting their 2 percent inflation target. Last month, personal income rose 0.4 percent after gaining 0.2 percent in April. Wages increased 0.3 percent. With inflation accelerating, consumer spending moderated, posting a modest 0.2 percent increase in May. Data for April was revised down to show spending rising 0.5 percent instead of the previously reported 0.6 percent jump. When adjusted for inflation, consumer spending was unchanged in May.

Larry Kudlow, director of the White House National Economic Council, urged the Federal Reserve to raise rates slowly, “very slowly,” ignoring the practice from preceding administrations of avoiding comments on monetary policy out of respect for the U.S. central bank’s independence. Previous White Houses in recent decades have tried to avoid public comment on the Fed. This morning Kudlow also claimed that the deficit… “is coming down.” Which sounds good, but it isn’t true. The deficit in fiscal year 2017 ($665 billion) was bigger than it was in fiscal year 2016 ($587 billion). And the GOP has now passed its big trillion-dollar tax-cut package and ramped up spending in other areas. The result? The nonpartisan Congressional Budget Office projects that the deficit will climb to $1 trillion annually by 2020. The most recent monthly statement from the U.S. Treasury Department is through April, and despite showing record tax collections — the deficit was still widening as a result of increased spending. For the first seven months of fiscal year 2018 (October through April), the deficit stood at $385 billion, which was 12 percent more than it was the same period a year earlier. So, no the deficit is not coming down.

The trade tensions are starting to hurt consumer morale. A survey by the University of Michigan showed consumer confidence dipping in late June and households’ near-term inflation expectations ticking up. It’s still too early to tell how long the European Union’s united front and the respite in the yuan’s decline will last, for now the risks to financial markets appear to have eased, or traders are just not listening to the rhetoric until it actually results in a specific action. Today, Treasury Secretary Steve Mnuchin denied a report that Trump wanted the United States to withdraw from the World Trade Organization. A U.S. withdrawal from the WTO would send global markets into a spiral and cast trillions of dollars of trade into doubt. It would also blow up an institution that for 70-plus years has been a pillar of global economic and political stability. The consequences of a U.S. withdrawal are so profound that the trade community hasn’t seriously entertained the possibility that Trump would try to withdraw.

The Trump administration in May launched an investigation into whether imported vehicles posed a national security threat, and Trump has repeatedly threatened to quickly impose a 20 percent import tariff on cars and trucks. Today, General Motors warned on that any expansion of U.S. tariffs on imported vehicles being considered by the Trump administration could lead to a “a smaller GM” and risks isolating U.S. businesses from the global market.

American companies looking for a way out of punishing steel tariffs. They say the uncertainty is already raising costs, hurting their businesses and may cost them jobs. And they are asking for exemptions. Companies had filed more than 20,000 exemption requests through last week, arguing that they depend on imported steel and that domestic producers can’t fill the gap. The Commerce Department had announced a final ruling on only 98 of them. Complicating the process, large steel companies like US Steel and Nucor have tried to block many requests at the last minute, giving businesses that want exemptions little or no time to respond.

Canada struck back at Trump’s steel and aluminum tariffs, vowing to impose punitive measures on $12.6 billion worth of American goods until Washington relents. The Canadian tariffs will come into effect on July 1 and largely target U.S. steel and aluminum products, but also foodstuffs such as coffee, ketchup and whiskies. Mexico is slated to introduce countermeasures to U.S. steel and aluminum tariffs by hitting roughly $3 billion worth of U.S. imports with duties starting July 5. China is expected to immediately retaliate on a dollar-for-dollar basis against U.S. tariffs that are scheduled to be imposed on July 6 as the result of an investigation into Beijing’s technology transfer policies. The Trump administration announced earlier this month that it would slap a 25 percent tariff on $34 billion worth of Chinese imports and an additional list of $16 billion worth of imports.

Also on Sunday, July 1, Mexico votes for a new president. Lopez Obrador, commonly known as AMLO, is the heavy favorite to win. Mexican markets have rallied this month into a likely win by the leftist frontrunner in Mexico’s presidential election on Sunday, but local assets could sell-off if a landslide victory for his party forms a congressional majority. Ahead of the vote, Mexico’s peso firmed to its strongest since late May in early trading Friday before reversing direction and sinking around 1 percent. Stocks rose to their highest in more than eight weeks. Lopez Obrador’s economic team has been out in force to mollify investor concerns about a possible stark departure from pro-market policies or fiscal discipline. Still a lot of uncertainty, not so much that AMLO will win, but by how much, and how that might affect policy. Look for a bit of volatility.